Darden Restaurants' Revenue Falls Short, But Analyst Highlights Operational Execution
Portfolio Pulse from Shivani Kumaresan
Darden Restaurants Inc (NYSE:DRI) reported Q2 FY24 sales growth of 9.7% year-on-year to $2.727 billion, slightly below the consensus estimate of $2.741 billion. Despite the revenue shortfall, margins and EPS were ahead of expectations, demonstrating strong operational execution. Stephens analyst Joshua Long maintained an Overweight rating on DRI with a $170 price target. The company's sales growth was attributed to a 2.8% increase in same-restaurant sales. Current trends for December align with consensus expectations, and the casual dining segment may see relief based on DRI's performance. The company's revenue guidance was adjusted due to macroeconomic challenges, but this was balanced by a better inflation outlook and consistent unit development. DRI's stock traded down 0.55% at $162.19.

December 15, 2023 | 6:40 pm
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NEUTRAL IMPACT
Darden Restaurants reported a slight miss in Q2 FY24 revenue but exceeded margin and EPS expectations. The stock experienced a minor decline following the report.
While DRI's revenue was slightly below expectations, the positive aspects of the report, such as better margins and EPS, along with the analyst's maintained Overweight rating and price target, suggest a neutral to positive outlook. The stock's slight decline indicates a mixed short-term impact.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 100